PAUL KRUGMAN: The Obama administration wants to preserve those parts of the original tax cuts that mainly benefit the middle class — which is an expensive proposition in its own right — but to let those provisions benefiting only people with very high incomes expire on schedule. Republicans, with support from some conservative Democrats, want to keep the whole thing. And there’s a real chance that Republicans will get what they want. That’s a demonstration, if anyone needed one, that our political culture has become not just dysfunctional but deeply corrupt. What’s at stake here? According to the nonpartisan Tax Policy Center, making all of the Bush tax cuts permanent, as opposed to following the Obama proposal, would cost the federal government $680 billion in revenue over the next 10 years. For the sake of comparison, it took months of hard negotiations to get Congressional approval for a mere $26 billion in desperately needed aid to state and local governments. And where would this $680 billion go? Nearly all of it would go to the richest 1 percent of Americans, people with incomes of more than $500,000 a year. But that’s the least of it: the policy center’s estimates say that the majority of the tax cuts would go to the richest one-tenth of 1 percent. Take a group of 1,000 randomly selected Americans, and pick the one with the highest income; he’s going to get the majority of that group’s tax break. And the average tax break for those lucky few — the poorest members of the group have annual incomes of more than $2 million, and the average member makes more than $7 million a year — would be $3 million over the course of the next decade. How can this kind of giveaway be justified at a time when politicians claim to care about budget deficits? Well, history is repeating itself. The original campaign for the Bush tax cuts relied on deception and dishonesty. In fact, my first suspicions that we were being misled into invading Iraq were based on the resemblance between the campaign for war and the campaign for tax cuts the previous year. And sure enough, that same trademark deception and dishonesty is being deployed on behalf of tax cuts for the wealthiest Americans. MORE
RELATED: Senate Minority Leader Mitch McConnell on Sunday renewed his calls to exempt [the Bush] tax cuts from efforts to reduce the federal deficit while mostly sidestepping questions about offsetting the lost revenue. Appearing on Meet the Press, the Kentucky Republican worked to separate his opposition to Democrats’ plans to rescind the tax breaks for top income brackets from his criticism of budget deficits under President Obama. Ahead of the November midterm election, McConnell and other senior Republicans in public remarks have worked to balance their efforts to harness public concerns about growing federal debt and deficits with traditional GOP support for tax cuts by denying tension between those goals. That effort was on display Sunday. Pressed on the cost of renewing the so-called Bush tax cuts, McConnell reiterated his assertion, supported by few independent economists, that rescinding tax cuts for top earners would not generate revenue. MORE